Alzheimer's disease (AD) is a debilitating mental disorder that results in a progressive loss of cognitive functions. However, there is no effective treatment for this disease. The neurotoxin AB peptide plays a central role in AD, involving increased production and accumulation of AB in brain amyloid plaques. Proteolytic processing of the amyloid precursor protein (APP) is required to generate AB, which requires B-secretase cleavage of APP to produce AB. Strong evidence indicates that inhibitors of B-secretase should block AB production and be an effective treatment for AD. The key to drug screening for inhibitors of 8-secretase is a rapid high throughput formatted assay for authentic 3-secretase activity obtained from a natural, in vivo tissue source, with a complementary cell-based assay from the same in vivo tissue source. In the phase I grant period, endogenous B-secretase secretase activity was identified in isolated chromaffin vesicles (secretory vesicles) of neuronal chromaffin cells. These isolated vesicles contain all the known components required for production of AB consisting of APP, AB(1-40), B-secretase activity, BACE 1, and presenilin; these vesicles, therefore, provide an ideal model system for screening inhibitors of B-secretase. The Phase I grant developed the chromaffin vesicle system into two assays for screening inhibitors of B-secretase and AB production: (I) sensitive and rapid high throughput in vitro assays of authentic B-secretase activity, and (2) chromaffin cell-based assays to assess effects of inhibitors on cellular AB production. This Phase II proposal will use these assays to screen structurally diverse and focused combinatorial libraries for compounds that selectively inhibit B-secretase activity and AB production. Drug "hits" from these assays will be tested in initial animal toxicology studies for safety and pharmacokinetic properties, and in preliminary studies for reduction of AB in a transgenic mouse model of AD. This phase II project will, thus, provide lead compounds for B-secretase inhibitors that will be developed with pharmaceutical partners for new drugs to treat Alzheimer's disease. PROPOSED COMMERCIAL APPLICATION: The commerical application of this Phase II project will be development of novel drugs for Alzheimer's disease. The estimated market value for an effective Alzheimer's drug is $50 billion dollars and rising. Screening of combinatorial libraries with the unique high throughput 8-secretase assay, and chromaffm cell-based assay will provide new lead compounds for Alzheimer's disease. ActiveSite Biotech is in a position to exclusively sell, license, or partner lead drug inhibitors resulting from the Phase II study.